It's Easy to Promise a Caring Children's Policy, but Who Will Play Santa?

October 24, 1988|VICTOR R. FUCHS | Victor R. Fuchs is a professor of economics at Stanford University. He is the author of "Women's Quest for Economic Equality" (Harvard University Press, 1988). and

George Bush and Michael S. Dukakis seem to agree on one thing: America's children are in trouble and need help. Not all children, of course, but serious problems are evident in all regions of the country and among all ethnic and socioeconomic groups.

Compared with those of the previous generation, today's children are more than twice as likely to commit suicide, perform worse at school and use much more alcohol and drugs; they are twice as likely to be obese, and show other signs of increased physical, mental and emotional distress. The poverty rate among children (under age 18) is almost double the rate for adults--a situation without precedent in American history. The proposed solutions include broader access to prenatal care, more and better-quality day care, and increased funding for education, counseling services and supervised recreation. Such programs might deter youngsters from self-destructive paths and bring them to adulthood better equipped for work and family life. Virtually all these solutions have one thing in common: They require resources, including trained personnel, equipment, time and energy. Where can these resources come from?

One popular answer, "the government," is misleading. The government, through its power to tax and spend, can reallocate resources, but it cannot create them. Only the people can do that. Another popular answer, "business," is also based on an illusion. For instance, the phrase "employer-provided child care" leaves the impression that the needed resources will be provided by some nameless, faceless, high-paid executive. That is unrealistic. If employers provide child-care subsidies or other child-related benefits, most often the costs will be borne by American households in the form of higher prices for the firm's products and/or lower wages for its workers. Employers, like the government, can only allocate resources among individuals and families. If the allocation is to be toward children, there are only two possible solutions.

First, the adults in households that have children can shift resources away from themselves toward their children. This means spending more time with their children and spending a larger portion of the household's budget to meet their needs. Most parents already have considerably less leisure time than other adults of comparable age and education and they are more squeezed financially. Moreover, there seems to be very little that public policy can do to force such a reallocation of resources within individual households. It depends almost entirely on the willingness and ability of the parents.

The second possible solution is for the government to transfer resources from households that do not have children to those that do. Such a reallocation could occur in two ways. First, if income were distributed more equally in the United States, children would be the main beneficiaries even if there were no new explicitly child-centered programs. A more egalitarian distribution of income would help children because they are over-represented in low-income households and under-represented in more affluent ones. When households are ranked by income per person, the ratio of children to adults rises steadily as income falls. The highest 10th percentile consists almost entirely of adults--only 6% of the individuals in those households are children. By contrast, children account for 50% of those in the lowest income households. The increase in income inequality that the United States experienced in the 1980s undoubtedly contributed to the worsening position of children.

The second way of transferring resources from childless households to those with children is through taxes on all households to fund child-centered programs. Consider, for instance, that among the approximately 40 million households that are headed by someone between the ages of 25 and 44, about 14 million have only adult members. These adults are on average better educated and are more affluent than the adults in households that have children, primarily because each household has fewer persons to feed, clothe and shelter. Any program that directed resources toward children (whether for child care, education or health) that was financed by broad-based general taxes would in effect be transferring resources from the childless households. Such a policy is undoubtedly highly controversial.

Those who oppose such transfers can argue that adults who choose to have children do so knowing the financial and other implications of parenthood. Why, then, should those who are unwilling or unable to have children share in those costs?

The answer is that children are, to some extent, a public good, and that the entire society has a stake in the potential of the next generation. If Americans do not have enough children (the fertility rate has been below replacement level every year since 1973) and if children do not become healthy, well-educated adults, the country's future is bleak, regardless of progress with other issues.

We will face many difficult choices in the coming decade, but none more difficult than meeting the needs of the next generation. It is easy for candidates to promise to help children; it is far more difficult for all of us, parents and nonparents alike, to make the tangible commitments to ensure that help is really on the way.